AGREEMENT dated as of this 1st day of January, 1996 by and among MEDIQ,
Incorporated, a Delaware corporation on its own behalf and on behalf of its
subsidiary corporations and its officers, directors and employees and the
officers, directors and employees of its subsidiary corporations, ('MEDIQ' or
'Company') and Xxxxxxx X. Xxxxxx on his own behalf and on behalf of his
executors, administrator, successors and assigns ('Xx. Xxxxxx').
W I T N E S S E T H:
WHEREAS, Xx. Xxxxxx has been employed by MEDIQ as its President and Chief
Executive Officer and he has served as a member of MEDIQ's Board of Directors
and as a director of Nutramax, PCI, MHM, and MMI, all affiliates of MEDIQ or its
principal stockholders;
WHEREAS, Xx. Xxxxxx is a participant in and has certain rights with respect
to the Company's deferred compensation plan, employees savings plan and pension
plan, as well as options to purchase Company stock, which expire on January 23,
1996, all as are set forth in Schedule I appended hereto;
WHEREAS, in connection with a change in the Company's business direction,
Xx. Xxxxxx'x employment as President and Chief Executive Officer of MEDIQ
terminated on October 23, 1995 and in connection therewith has made certain
claims against MEDIQ with respect to compensation and severance;
WHEREAS, since October 23, 1995 MEDIQ has tendered Xx. Xxxxxx and Xx.
Xxxxxx has received the appropriate documentation permitting him to elect to
preserve his rights to continue certain benefits at his expense under COBRA;
WHEREAS, the parties hereto desire to compromise and settle all claims
which each may have against the other.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is acknowledged, the
parties hereto, intending to be legally bound hereby agree as follows:
1. Resignation from Employment. Xx. Xxxxxx hereby acknowledges and
affirms that his employment as President and Chief Executive Officer of
MEDIQ and its subsidiary MEDIQ/PRN terminated as of October 23, 1995. He
has or will promptly relinquish and return all Company property including
credit cards, computers, lists and accounts.
2. Board Positions. Xx. Xxxxxx resigns effective January 1, 1996 as a
director of MEDIQ. Xx. Xxxxxx will not be slated for election as a director
at MEDIQ's 1996 annual meeting, and it is understood that MEDIQ and its
principal stockholders are free to take such action as they deem
appropriate with respect to the slating or voting for the election of Xx.
Xxxxxx to the boards of directors of Nutramax, PCI, MHM and MMI. Xx. Xxxxxx
agrees that, if not so slated or voted for, he will make no challenge to
the decision of MEDIQ or its principal stockholders. In addition, upon
MEDIQ's written request, Xx. Xxxxxx will affirmatively inform any of these
companies that he is unwilling to be slated for election as a director.
3. Severance. MEDIQ shall pay Xx. Xxxxxx as xxxxxxxxx pay
$1,185,000.00 in 36 equal monthly installments, the first three such
payments being due seven days after execution of this Agreement and
subsequent payments being due on the 15th day of each month thereafter. Xx.
Xxxxxx acknowledges that these payments will be subject to any required
withholding of federal, state and local taxes. In the event of his death
prior to his receipt of the entire severance, the remaining installments
shall be paid to Xx. Xxxxxx'x wife, if she survives him, or to his estate
if his wife predeceases him, in either case in a lump sum at its then
present value discounted at the then prime interest rate plus one percent.
Such severance shall be in full satisfaction of all obligations, including
claims for bonus, to Xx. Xxxxxx except for his vested rights under various
Company plans listed in Schedule I. MEDIQ's severance obligations hereunder
shall cease immediately in the event that Xx. Xxxxxx shall materially
breach his obligations under Paragraph 2, 5 or 6(a) of this Agreement.
4. Cooperation. For a reasonable period following the execution and
delivery of this Agreement, Xx. Xxxxxx shall make himself reasonably
available (with due consideration as to Xx. Xxxxxx'x other commitments)
upon request of MEDIQ to assist MEDIQ with regard to matters where he, as
the former CEO, has unique knowledge or perspective. Xx. Xxxxxx shall be
reimbursed for all out-of-pocket expenses (including first class air travel
and accommodations) incurred in connection with any such assistance.
5. Non-Disclosure of Confidential Information. Xx. Xxxxxx shall not
without the prior written consent of MEDIQ, use or disclose in any manner,
directly or indirectly, any non-public information concerning MEDIQ or any
of its subsidiaries.
6. Non-Disparagement. (a) Xx. Xxxxxx shall make no statement which is
directly disparaging of or is otherwise negative about MEDIQ, its officers
or directors or about its subsidiaries or their officers, directors and
employees.
(b) MEDIQ shall make no statement which is directly disparaging of
or is otherwise negative about Xx. Xxxxxx.
7. Release. (a) In consideration of the benefits herein provided and
as a material inducement for MEDIQ to enter into and perform its
obligations under this Agreement, Xx. Xxxxxx hereby releases MEDIQ, its
subsidiaries and their respective shareholders, affiliates, officers,
directors, employees, agents and representatives and each of them from and
against any and all claims which Xx. Xxxxxx may have against them or any of
them arising out of events occurring prior to the date of this Agreement,
including but not limited to, any claim for employment discrimination,
wrongful termination, breach of any agreement, express or implied, written
or oral, or any other claim arising under any federal, state, or local
common or statutory law including claims of age discrimination.
(b) As a material inducement for Xx. Xxxxxx to enter into this
Agreement, MEDIQ hereby releases Xx. Xxxxxx from and against any and all
claims which any of them may have against him arising out of events
occurring prior to the date of this Agreement.
(c) Notwithstanding the mutual releases as set forth in the
foregoing subparagraphs (a) and (b), nothing contained herein shall
affect the right of any party hereto to enforce the terms of this
Agreement, and it is understood that Xx. Xxxxxx retains all rights to
indemnification as a director or officer of MEDIQ or as a director or
officer of its subsidiaries as provided under the respective By-laws of
those corporations and applicable law and that this release does not
purport to affect any of Xx. Xxxxxx'x rights under the plans listed on
Schedule I.
8. Confidentiality. Each party hereto agrees that the terms and
conditions of this Agreement shall remain strictly confidential and shall
not be disclosed by any party to any person who is not a party to this
Agreement (with the exception of a spouse, financial advisor, accountant or
attorney of a party) unless such disclosure is required by law.
9. Certain Representations. Each party hereto represents and agrees
that he or it has consulted with counsel, that he or it fully understands
the terms of this Agreement and is free and voluntarily entering into this
Agreement in consideration of the covenants and agreements herein set
forth. Xx. Xxxxxx represents that he has had 21 days to consider this
Agreement before its execution, and that he may revoke his Agreement for a
period of seven days after he has executed it.
10. Legal Fees. Each party hereto shall bear his or its respective
legal fees in connection with the negotiation and the consummation of this
Agreement.
11. Entire Understanding. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject hereof and
may be modified or amended only in writing signed by each of the parties
hereto.
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12. New Jersey. This Agreement shall be construed and interpreted
under the laws of the State of New Jersey.
13. Non-Admission. MEDIQ does not concede and expressly denies that
it has violated any law, statute, ordinance, contract, duty, or obligation
whatsoever, or that it committed any tort or engaged in any wrongful
conduct with respect to Xx. Xxxxxx.
14. No Reemployment. By this Agreement, Xx. Xxxxxx agrees that Xx.
Xxxxxx shall neither apply for employment nor seek reinstatement of
employment with MEDIQ in the future. Xx. Xxxxxx hereby waives any rights
that may accrue to Xx. Xxxxxx and releases MEDIQ from any liability that
may arise against it because of any rejection of any application for
employment with MEDIQ that Xx. Xxxxxx may make notwithstanding this
provision.
15. Notices. Any notice required or permitted hereunder shall be
given to a party in writing at the respective address set forth below by
certified or registered mail, return receipt requested, or at such other
address as a party may provide by written notice:
To Xx. Xxxxxx: Xxxxxxx X. Xxxxxx
0000 Xxx Xxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
To MEDIQ: MEDIQ INCORPORATED
Xxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
16. Agreement Binding. This Agreement shall be binding upon the parties
hereto, their respective successors and assigns, heirs and administrators, as
the case may be.
17. PCI Compensation. MEDIQ acknowledges that if Xx. Xxxxxx continues to
play a role in the sale of PCI and makes a significant positive contribution
thereto, MEDIQ may, in MEDIQ's discretion, pay Xx. Xxxxxx a bonus in connection
therewith.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
/s/_Bernard J. Korman_________________
Xxxxxxx X. Xxxxxx
MEDIQ
By:_/s/_Michael J. Rotko______________
Chairman
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SCHEDULE I
LIST OF XX. XXXXXX'X ACCOUNTS
MEDIQ Employees Savings Plan
Executive Security Plan (it being understood that Xx. Xxxxxx'x deferred benefit
account under the Executive Security Plan will continue to be credited at the
retirement interest yield until his normal retirement date (age 65) and will be
amortized using the same rate)
MEDIQ Employees Pension Plan (full benefits payable as of November 1, 1996)
Stock options in respect of 500,000 shares of MEDIQ stock pursuant to
certificate dated as of August 25, 1993
Rights to continued medical and dental benefits under COBRA
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